DP14297 International Jurisdiction over Standard-Essential Patents

Author(s): Henrik Horn
Publication Date: January 2020
Date Revised: January 2020
Keyword(s): Default rules, international jurisdiction, Standard-essential patents
JEL(s): F15, K21, K33, L40, O38
Programme Areas: Industrial Organization, International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14297

Standards often require the use of patented technologies. Holders of standard-essential patents (SEPs) typically commit to make their patents available on "fair, reasonable and non-discriminatory" (FRAND) terms. National competition authorities increasingly intervene against perceived FRAND violations. But which competition authority should regulate SEPs that affect more than one country? The paper uses a very simple economic framework to assess the impact of three main legal bases for allocating jurisdiction: territoriality, nationality, and cross-border effects. The findings are negative: neither base will implement a jointly efficient outcome, and the relative performance of the bases depends on the particular circumstances at hand.